NEW CASTLE, Pa., Dec. 22 /PRNewswire-FirstCall/ -- Axion Power International, Inc. (OTC Bulletin Board: AXPW), the developer of advanced lead-carbon PbC� batteries, today announced it has completed a private placement of an aggregate of 45,757,572 shares of its common stock to institutional and individual investors at a price of $0.57 per share for total gross proceeds of $26,081,490. Proceeds will be used to add needed electrode production lines and for working capital. The investors included Special Situations Funds, Manatuck Hill Partners and Narragansett Strategic Master Fund. In connection with the offering, the holders of the Company's outstanding 8% Cumulative Convertible Senior Preferred Stock converted their shares into an aggregate of 1,390,944 shares of common stock and the requisite holders of the Company's outstanding Series A Preferred Stock agreed to convert their shares into an aggregate of 8,785,483 promptly after the closing. In addition, The Quercus Trust, an existing investor in the Company, agreed to certain amendments to its existing agreements with the Company and agreed to certain transfer restrictions on its securities for a year after the closing.

The shares of common stock issued in the offering have not been registered under the Securities Act of 1933, as amended, or applicable state law and may not be offered or sold in the United States absent registration or an applicable exemption from registration requirements. The Company has agreed to register the shares issued for resale under applicable federal and state securities laws.

The placement agents for the offering were Dallas-based Stonegate Securities; King of Prussia PA-based Emerging Growth Equities; and Philadelphia-based The Philadelphia Brokerage.

About Axion Power International, Inc.

Axion has developed and patented a next generation energy storage device that won the prestigious Frost & Sullivan Technology Award for North America in the field of lead-acid batteries. According to Frost & Sullivan, Axion's new PbC� batteries have "the potential to revitalize the lead-acid battery industry by breathing new life into an established technology that is not well suited to the requirements of important new applications like hybrid electric vehicles and renewable power."

Axion Power International Inc. is the industry leader in the field of lead-acid-carbon energy storage technologies. Axion believes this new battery technology is the only class of advanced battery that can be assembled on existing lead-acid battery production lines throughout the world without significant changes to production equipment and fabrication processes. It also believes it will be able to manufacture carbon electrode assemblies in volume at low cost using standard automated production methods that are commonly used in other industries. If and when its electrode manufacturing methods are fully developed, Axion believes it will be able to sell carbon electrode assemblies as virtual plug-and-play replacements for lead-based negative electrodes used by all other lead-acid battery manufacturers. Axion's future goal, after filling their plant's lead-carbon battery production capacity, is to become the leading supplier of carbon electrode assemblies for the global lead-acid battery industry.

For more information, visit www.axionpower.com

Forward-looking Statements

Certain statements in this Press Release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. These statements include, without limitation, statements concerning the Company's ability to expand its manufacturing capabilities and bring its new PbC� based battery products to market, the Company's belief that its completed products will be the only class of advance battery of its kind and that it will be a viable replacement for older generation lead-acid batteries. These forward-looking statements are based on our current expectations and beliefs and are subject to a number of risk factors and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. Such risks and uncertainties include the risk for the Company to complete its development work, as well as the risks inherent in commercializing a new product (including technology risks, market risks, financial risks and implementation risks, and other risks and uncertainties affecting the Company), as well as other risks that have been included in filings with the Securities and Exchange Commission, all of which are available at www.sec.gov. We disclaim any intention or obligation to revise any forward-looking statements, including, without limitation, financial estimates, whether as a result of new information, future events, or otherwise.

    Contacts
    Axion Power International Inc.
    Thomas Granville, CEO
    (724) 654 9300
    Allen & Caron Inc
    Rudy Barrio (Investors)
    r.barrio@allencaron.com
    (212) 691-8087
    Brian Kennedy (Media)
    brian@allencaron.com
    (212) 691-8087

SOURCE Axion Power International Inc.